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Sep 10, 2018

EU, US seek to clear trade talks confusion

Top officials from the US and EU meet in Brussels on Monday in an effort
to iron out differences on trade talks announced to great fanfare this
summer.
US President Donald Trump and European Commission head Jean-Claude
Juncker in July pledged to hold off from further tit-for-tat tariffs and
to work towards a limited trade accord that would scrap customs duties
on all goods.

Both sides ballyhooed the deal as a major breakthrough, but subsequent
statements made clear that misunderstandings persisted, especially over
agriculture, which Washington insists will be a key part of any
agreement.

Under pressure from France, the Europeans firmly reject that farming
goods be included in trade negotiations and Europe's top trade official
Cecilia Malmstrom will attempt to clear up the matter with US
counterpart Robert Lighthizer.

"The idea is that the commission and the United States agree on a
framework document, perhaps by the end of the year," a European source
told AFP.

"Trump and Juncker have an agreement, but in reality, we didn't completely agree on the scope of the discussions," she added.

Officials have set very low expectations for the meeting, which is the
first of several expected sitdowns to map out on which sectors common
ground can be found.

- 'Bad as China' -

The summer's mending of fences is fragile however, with Trump last week
again haranguing the EU and raising the spectre of slapping tariffs on
Europe's auto industry, especially with mid-term elections approaching
in the US.

Auto tariffs would be seen as a devastating blow by Germany and would
add to existing levies on steel and aluminium that Trump imposed on
Europe in June. The EU imposed a raft of counter-duties in return.

The EU's Malmstrom late last month said that a trade deal could include
scrapping transatlantic tariffs on autos, but Trump swiftly excluded the
possibility adding that Europe was virtually closed to US cars.

"It's not good enough," Trump said, speaking of the Brussels offer.

Trump also worryingly compared the EU to China, which on Friday received
a threat of tariffs on all goods exported to the United States.

"The European Union is almost as bad as China, just smaller," Trump told Bloomberg on August 31.

But the Europeans, led by jittery Germany, want the US at the
negotiating table and seem ready to hand Trump small victories in
exchange for the truce.

Since July the EU commission has announced a series of commitments to
the US, but observers point out that these are largely done deals.

Most-celebrated by the White House is a huge increase in European
purchases of US soybeans, that Trump says vindicates Washington's
toughness and resolve against its partners.

EU officials however say the explosion in demand is purely a market
phenomenon and a knock-on effect of Trump's trade war with China.